Pac-12 TV Network: Assessing the options, predicting the outcome

Guessing along with Pac-12 commissioner Larry Scott is a risky business, fraught with the potential for the guesser (in this case: me) to look very silly.

But guessing along with Larry Scott is also fun.

So here we go …

*** The original timeline for a detailed announcement on the Pac-12 Network structure was late June/early July.

But that has been pushed back-back-back, to the point that I’d be shocked if the conference has any substantive news before, or during, the football media event in Los Angeles on Tuesday.

In fact, we’re probably looking at the middle of next month — and it could be later.

The network is scheduled to launch in Aug. ’12, and it will take about a year, according to Scott, to get everything in place. But his priority has to be getting the right structure, even if it takes longer than desired.

*** Scott and deputy commish Kevin Weiberg face a tough balancing act. The network is for the long haul, but the best broadcast structure for fans in 2022 is not necessarily the best broadcast structure for fans in 2012.

The conference has discussed partnering with Apple or Google in anticipation of the eventual widespread convergence of the internet and televisions — surfing the web on your big screen.

But according to multiple league and industry sources, there’s significant (and justifiable) concern that the vast majority of fans won’t be ready for “TV everywhere” for a few years … and would be alienated in the near term.

As a result, Scott and Weiberg are focusing on a more traditional arrangement in which the Pac-12 Network would partner with a cable or satellite operator (as the Big Ten partnered with Fox).

This does not rule out the internet TV model. Several sources have suggested that the conference would like to pursue both paths (traditional and internet) and is exploring ways to make that happen — if not now then in the future.

But from what I’ve gathered, football and men’s basketball games will almost certainly be distributed through the cable/sat operator in a subscription-based model.

(Obviously, sub fees would allow for quicker profitability.)

*** So who’s the operator of choice?

That’s the $100 million question.

One option is to flip a channel the way Discovery Health became the Oprah Winfrey Network, and the conference had partnership discussions with Discovery early in the process, according to a source.

But that path might require the conference to give away more equity than Scott would like in exchange for the programmer’s existing distribution.

*** Far more likely is a standard partnership with …

* Fox?

Doesn’t seem like it.

“We’re not in any discussions with the conference about a Pac-12 Network,” Fox Sports spokesman Chris Bellitti told me. “We’re happy with our new Pac-12 media rights agreement.”

* Comcast?

One source said that’s highly unlikely.

(Comcast, which reportedly bid $230 million/year, was not happy about losing out to Fox and ESPN on the Pac-12 media rights deal.)

* DirecTV?

Perhaps. It’s based in Southern California (El Segundo), and that’s an important consideration for the conference.

* ESPN?

Cannot be ruled out until it’s officially out, but ESPN doesn’t usually do dedicated networks. (Its partnership with Texas is the exception.)

* Time Warner?

Ding-ding-ding.

My guess … and it’s only a guess … is that the Pac-12 partners with Time Warner, the primary cable distributor in L.A. County with, ahem, 2 million subscribers.

If you haven’t noticed, TWC has become an aggressive player in sports broadcasting lately. (Think: Lakers, 20 years, $3 billion.)

Jon Wilner

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I understand trying to cater to the large LA marketplace, but a regional solution like TimeWarner would be awful for people across the country – which is what I thought the Pac12 was trying to avoid. Living on the East Coast, I was hoping to be able to have that channel to see games that I can’t get otherwise. Doesn’t look like that will happen now…

Bill

Agree with Landon, and I don’t think Scott would go with the regional TimeWarner. He is all about national exposure. It has to be available on Dish AND Directv.

N of the border

“All Scott needs to do, for example, is schedule the Oregon-Washington game for the Pac-12 Network and, presto, it will be available on every cable system in the Pacific Northwest.”

Well, when Oregon sold their dedicated programming to Comcast about 4 years ago the Ducks disappeared from large portions of the state where there are cable companies not named Comcast. It all came down to money, Comcast wanted more than the other operators wanted to pay. If Time Warner wants to charge too much, the same thing will happen to the Pac-12.

Calfan

Subscription based model? Is this like NBA TV, that you have to pay for a “premium” package, on top of what you already pay to get your regular package? I hope not. If it’s incorporated into a “regular package” then that’s one thing, but if it’s a premium subscription model I’m not sure how many people would pay for it. That also would not get you widespread exposure. We’ll see how Scott plays this one. I’d think he’ll work out something that will satisfy most people and generate income, based on his track record.

splash

I hope he means “subscription” in the same way that ESPN charges cable and satellite companies a subscriber fee of $4.08 per viewer. It’s usually up to the cable companies to decide how they want to pass on that fee to their users. In the case of ESPN, they have enough clout to stay in the expanded basic tier, but less desirable channels have a hard time doing so. Even the NFL network hasn’t been immune to the posturing of cable companies.

Papa John

What about the international, especially Asian, coverage of Pac-12 sports, especially of the non-football variety? Or is that a different deal altogether than the Pac-12 Network?

alchemist

Bill:

Why couldn’t it be available on Dish and/or DirecTV even if we go with TWC? DirecTV is in negotiations to pick up the Longhorn Network and it doesn’t even have content.

The other thing that might make TWC more attractive especially is Comcast is still all butthurt that we got a better offer, is they are also a broadband provider. If the Pac 12 Digital Network ends up being patterned on ESPN3 where the league charges internet providers a per-subscriber fee then that gets us several million customers there from the first day. And even if we just decide to give the digital network away for free and charge for advertising, partnering with an internet service provider might help get us around broadband access caps or extra fees for bandwidth use like what Comcast and Netflix are having a staredown over.

Os Beaver

DISH and DirectTV availability is crucial among other aspects. Has to have good national coverage. Have a traditional and digital aspect. Have almost everything not on the traditional network for the bigger events be available for stream or download on a digital network. But to be a big hit, the satellite coverage has to be there in 2012. Scott has to keep pushing the envelope so we can be more sexy than the SEC to Oklahoma and whoever we want to come with them to get a very good PAC-16 sometime this decade.

Myk

“Subscription based model? Is this like NBA TV, that you have to pay for a “premium” package, on top of what you already pay to get your regular package?”

– Pac 12 Network will be part of a sports network package at a cable company. That is a given. If you want the Pac 12 Network your provider will make you pay for it. That’s the pay off for getting more access to your favorite team’s games.

alchemist

Myk:

It’s a given? You know that how?

Dawgfan

The BTN is part of extended basic cable in 6 great lakes cities. I imagine we will see the same.

Scott knows the value of exposure and he would not sacrifice it for a somewhat better buck.

David

Comcast can go suck it. Good they didn’t get it.

Adam

Pac-12 and Scott better be careful. Partnering w/ a cable company (like Comcast or TimeWarner) can be dangerous. They have competitors (Comcast, TimeWarner, DirecTV, Dish, and many more) where they want to have exclusive content to beat the other. Pac-12 network would be just the channel for them to try and pull in new subscribers and get people to switch.

Not saying that the Pac-12 is the MWC, but Comcast/CBS have been reluctant to price the MTN channel super aggressively because of Comcast’s distribution business.

Far better to go w/ a content provider like ESPN/Fox/NBC/CBS/other.

chris

“All Scott needs to do, for example, is schedule the Oregon-Washington game for the Pac-12 Network and, presto, it will be available on every cable system in the Pacific Northwest.”

Jon – not sure about this – Comcast has been screwing us on CSN Northwest for what, five years now?

alchemist

Adam:

That won’t be an issue.

The Big Ten Network is a much better comparison than the Mountain West is for what the Pac 12 will do. I say that not because the Big Ten is the Big Ten, but rather because of what they two conferences gave up when they launched their respective networks.

The Big Ten retained 51% equity (read: controlling interest) in the BTN and sold the other 49% to Fox to handle production and get the network on DirecTV from the beginning. That 51% meant the Big Ten was in charge and had final say in things. The Mountain West only retained 30% equity in their network, with the rest being held by Comcast and CBS and Comcast being in charge of administration. Since the MWC doesn’t have controlling interest they can’t do things like set the carriage fee at a level that maximizes distribution instead of number of cable subscribers for Comcast.

If the Pac 12 does partner with TWC, I doubt we’ll even give up the equity the Big Ten did and the mtn’s problems won’t be repeated again here.

ccrider55

I wonder if the winds of change blowing in the Big12ish has anything to do with the seemingly delayed announcement as to the makeup of the P12Network? Probably not….

alchemist

ccrider:

Eh, probably not. But if you do want to think out loud just a bit….

It appears that the Longhorn Network is having some distribution problems. ESPN wouldn’t be surrendering one of its broadcast rights if it didn’t think it had to, and for now at least that plan is on hold. Time Warner Cable has not been afraid to hold out on sports networks before (they famously didn’t have the Big Ten Network in Columbus for the first year) and they still are holding out on the NFL Network to this day. TWC just so happens to be the dominant cable provider in the state of Texas, servicing Dallas, San Antonio and several other major markets in the state. Austin, too.

NFL Network wants $0.61 per subscriber and offers eight NFL games during the playoff race. ESPN is asking $0.40 per subscriber for the Longhorn Network, which will have one football game a year against a patsy, a couple basketball games and two or three weekly shows with Mack Brown (no joke). Just looking at price, content and history, it’s not inconceivable that Time Warner will refuse to get on board with the Texas network at all.

So if we sign on with TWC and get distributed through their system, it’s possible that come this time next year, the Pac 12 Network will have better distribution in Texas than the Longhorn Network. Call it a slim but tantalizing possibility. If it ever came to pass I would laugh myself stupid, and probably need a cigarette.

Mal

”’When Oregon sold their dedicated programming to Comcast about 4 years ago the Ducks disappeared from large portions of the state where there are cable companies not named Comcast”

Don’t you mean the Portland Trail Blazers? Actually, both, Oregon was on Comcast’s channel 37 which was really bad for fans in SW Washington that didn’t give damn about the puddle poopers, but lost out on the coverage of the Huskies. People in SW Washsington do not like the Ducklings.

Mal

“It appears that the Longhorn Network is having some distribution problems”

It’s got a bigger problem than that. They want to air Texas High School football games on the U of Texas network…and this is threatening the continued existence of the entire Big12 conference.

206

Great convo…look the key is that no one carrier is going to be the perfect solution for PAC-12 market saturation nationally and regionally. regionally TWC is strongest because of two premier PAC teams & 2 million diehard subscribers in the L.A. market, but DirecTV is still a strong regional contender because of the NFL ticket in a L.A. market with no local team to locally broadcast.

Nationally DirecTv/Dish gets much deeper penetration in non-traditional PAC-12 markets but is servicing stranded conference alums and winning new fans as important as keeping the West Coast base satisfied?

The wildcard is the Google/Apple web presence. If the PAC can push the technology envelope get to where it can offer a true tv experience on the Net (more providers like Fios are able to support internet on tvs) and provide a mobile App player that can access all games for a reasonable price point (say $20-30 football season) it will set the standard and get maximum saturation that satisfies stranded alums and reaches a new fanbase. If so, it should be a worth a lot to a Google to demonstrate that it is a player in online sports production and a cutting edge partnership would be invaluable going forward.

ccrider55

Mal:

I’d be concerned that the HS issue is a stalking horse. UT/ESPN will “give it back” in exchange for an accommodation on broadcasting Big12ish games (plural) effectively becoming the defacto Big12ish network. I’d be very much against this if I was the other members, even if the monies are shared completely equally. It would be like renaming the P12Network the Trojan Network, or the Huskie network. you could never have a broadcast that didn’t promote the school whose name is on the network title.

alchemist

ccrider:

ESPN is talking about coming into Arizona and broadcasting high school football games from there because a quarterback from Phoenix has committed to the Longhorns. Hopefully the NCAA kicks that in crotch first, and then the Big 12 can fight about the conference game rights instead of using it as a give-back to stop the high school games.

NagelUte

“according to multiple league and industry sources, there’s significant (and justifiable) concern that the vast majority of fans won’t be ready for “TV everywhere” for a few years … and would be alienated in the near term.”

I’m not sure I understand this mentality. What is there to get “ready” for in using “TV everywhere” approaches? All you need is an internet connection, a computer (or computerized media device), and HDMI cable, and a TV screen. If you currently have cable or satellite, you might already have all or most of those things. It takes very little skill to set up (simpler than a cable box), and it is easy to navigate. Go to the website hulu.com, find a show, click on a show, and watch it.

And, the nice thing is once you learn how to do that at home, it is the same anywhere you go. So if your at your inlaws house, it will be the same process. Same goes for using it on the go on a laptop or phone. So help me see where this hesitancy comes from.

I think Wilner and the media guys he talks to might be missing the boat on this one. Two things pointing me to that opinion are BYUtv’s new mobile phone app that will let you watch BYUtv and some archived ESPN content anytime for free, and the fact that internet TV is a “sizzling market”, to put it in Wilner’s own terms.

I should note that one article below states that Hulu will have 1 Million paid subscribers at $7.99 per month very soon. That’s revenue of $95.88 Million just from memberships. Imagine the growth adding a Pac 12 network to that would cause. You would probably see that 1 Million number double or triple in a matter of weeks. And much of that revenue would go straight to the Pac 12.

But, they are now able to claim that something has been given back, even though it may have been a nonstarter (politics 101). Notice all the media attention to that piece and how the attention to the sub-contracting of Big 12 games has recently been talked about in a “working something out” kind of way.

alchemist

ccrider:

Or complaining about the high school games could be politicking from the nine dwarves.

It could be that A&M and OU have been fuming about the high school games (they’ve been known about since January) and saw the push for a second football game as their chance to kill UT’s new recruiting advantage. They’re willing to graciously concede allowing the Longhorn Network to broadcast a second game, which will never be the OU or A&M games, in exchange for an end to the high school football plans. Neither A&M nor OU really give up anything and they keep the recruiting playing field from becoming too uneven. Everyone’s a winner except the poor schmuck who actually does end up losing their game, but really whoever it is should just count themselves lucky they still have a conference to be it.

Totally unrelated: I love the Pac 12.

ccrider55

alchemist:

That sounds very plausible, except that it would require that aTm and OU are conceeding that the LHN is the B12N and simply want to get paid. I don’t think that s the case I see aTm continuing getting ready to SECeed.

On that note I heard a radio interview with Aggie Insider David Sandhop a couple days ago during which he said, though not well known, about 6 months ago the BOR empowered the aggie Pres to make conference affiliation decisions without having to get the BOR together to vote on it. Had that been the case last year……. aTm and SEC have been talking weekley for some time, before the latest dustup. They are getting their ducks in a row.

chris

NagelUte,

What is there to get ready for? Lots.

Lots of us don’t have the time nor the energy to devote to all the internet things. Even if we could figure it out we’re tired and just want to flip the TV on and watch; not figure out all these devices. Yes, that’s us with jobs, kids, and other things. We’re the demographic that has cash, but we lack time because we have kids too.

Add in folks like my parents in their 70s. They have Netflix, but can’t figure out how to use it, and then it becomes deactivated here and there.

So if you are a 20 something with time on your hands, you’ve got it down. if you are in your 40s or later with kids, homes, yards, wives, and WORK in a professional job 50-60 hrs per week, you don’t have time for all this stuff. It is real.

alchemist

NagelUte:

The problem with the all-digital thing is that people will have to be looking for it to find it. Having a TV channel that is in about the same place as the other sports channels will mean that when people go thumbing through their on-screen guides they see the Pac 12 content right there and it’s only a button push away, as opposed to something that is set up in a unique way that is difficult for the casual observer to find.

Subscription fee revenue is also questionable. There are 18.5 million homes in the six Pac 12 states. If Scott gets on just 10 million of those, gets on none in any other state, and charges a 50 cent carriage fee (for comparison, the Big Ten gets 70 cents per in-market household and the Pac 12 has better content) then we’ve cleared $60 million in revenue before the first ad is sold. Even if we make that up by selling a million yearly subscriptions at $60 apiece, we’ll still have a much smaller audience and so ad rates are going to be lower. For now there’s too much money in a traditional network to not do that.

I would still like to see a digital network launched that could be distributed through Hulu, a smartphone app, YouTube, Apple TV or some other vehicle(s) to show everything that doesn’t make the on the TV network and to handle the overflow when more than one football game is scheduled at the same time. But there is no way it should be the primary distribution method for the entire network in 2012.

dunstvangeet

I’d also like to see an On-Demand thing with the PAC-12 network. Imagine where the online digital network would host streaming videos of all PAC-12 games after they’re broadcast (plus, say 24 hours), maybe distributed through Hulu. Hulu would be a perfect venue for rebroadcasts of football and basketball games, as well as the non-revenue sports, such as Volleyball, Soccer, Baseball, and Softball.